Today's lesson

Wow, a brutal day, crazy wild swings in the blink of an eye.

Opening balance £350

Closing balance £205

Day's trading loss £145

In the brief time I've devoted to this I've been amazed at how fast prices can change, I've seen a couple of 10 point runs in a minute out of nowhere. Today I witnessed a 60 point swing in just under 2 minutes. Crazy, scary stuff, it just took off like a bat out of hell.

I'm fast educating myself, I realise I know nothing in this area but I'm a commited learner. Today's most important lesson is this.

LISTEN TO FINANCIAL NEWS LAST THING AT NIGHT AND BEFORE I TRADE IN THE MORNING.

Yesterday's trading close was 5378 but at one stage during trading nudged past 5400 and peaked at  5405. Today's opening figure was 5348. Now, I should add I was at my desk in my office at 7.30 this morning and my head was full of my day job. On auto pilot I logged on and went long.

Not only did I not research why the price dropped 30 points overnight but I didn't wait for the opening few minutes to show me where the market was going. I also violated my stop loss promise I had made to myself and margined out £100 within 10 minutes. Enough basic errors for you?

Having found out why the price had dropped (China making a statement that wasn't well received, more worries from Spain) I waited a while and saw the market had stabilised slightly from 5300 at 10am to 5320 around an hour later. I thought the bad news had been digested and was ready to move up slowly to around 5350. Half an hour later I margined out again as the index plunged way below 5300.

All the while I'm heavily involved in my day job and can't give trading the attention it demands.

Sobering account balance at £114.

At 5284 I'm stupidly bullish and going against all logic and what I've learned so far and target 5300 thinking it could be a support level for the day. My account balance can only allow me £1.80 per point. Last week I had built the account to trade at £10 a point.

The phone rings, I talk, look away, look back and the index is racing beyond 5300...5310...there goes 5320....whoosh all the way past 5330, still racing away, way past 5340.....5350. WTF?!! I try to close my position but the price is fluctuating so wildly it won't pause for breath and allow me to close my position.

Phew, I manage to get my trade executed and have made an astonishing 50 points in the blink of an eye.

I'm really enjoying learning this game. I'm even on my start up capital and have learned so much in a week. I'm experimenting with everything I've read, seen and been told (already been to 3 seminars) and have grown my money from £200 upto £600 playing defensively and sensibly.

I've been a little risky and taken a few chances and inside a week I've been taught the only correct way to play. Tomorrow I'm going to split my day in two. I'm going to trade from home in the morning (with my sensitive laptop (see yesterday's entry) and go to the office around midday.

TRADE ONLY IF I CAN GIVE 100% FOCUS.

LIMIT LOSSES WITH A STOP LOSS OR WITH FINGER POISED ON BUY/SELL BUTTON.

Tomorrow's target is to trade as if I have £100 a point riding on every move. No experimenting just sensible, defensive trading and only when I see definitive price action. I shall be dissapointed if I haven't made money tomorrow. Oh and once I have quit trading for the morning that's my trading done for the day.